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2014
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2014
OR
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
____________________________________________________________________________
Commission file number 1-815E. I. DU PONT DE NEMOURS AND COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization) 51-0014090
(I.R.S. Employer Identification No.)
1007 Market Street
Wilmington, Delaware 19898
(Address of principal executive offices)
Registrant's telephone number, including area code: 302-774-1000
Securities registered pursuant to Section 12(b) of the Act
(Each class is registered on the New York Stock Exchange, Inc.):
Title of Each Class
__________________________________________________
Common Stock ($.30 par value)
Preferred Stock
(without par value-cumulative)
$4.50 Series
$3.50 Series
No securities are registered pursuant to Section 12(g) of the Act.
_____________________________________________________
Indicate by check mark whether the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act).
Yes No
Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ยง232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition
of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The aggregate market value of voting stock held by nonaffiliates of the registrant (excludes outstanding shares beneficially owned
by directors and officers and treasury shares) as of June 30, 2014, was approximately $59.9 billion.
As of January 30, 2015, 905,414,000 shares (excludes 87,041,000 shares of treasury stock) of the company's common stock, $0.30
par value, were outstanding. Documents Incorporated by Reference
(Specific pages incorporated are indicated under the applicable Item herein):
Incorporated
By Reference
In Part No.
The company's Proxy Statement in connection with the 2015 Annual Meeting. III

Table of contents

  • Page 1
    ... 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2014 OR TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 _____ Commission file number 1-815 E. I. DU PONT DE NEMOURS AND COMPANY (Exact name of registrant as specified...

  • Page 2
    ... of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements With Accountants on Accounting and...

  • Page 3
    ... Chemicals segment. As a result, during the year ended December 31, 2014 a pre-tax charge of $562 million was recorded. Additional details related to this plan can be found in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, on page 19 of this report...

  • Page 4
    ... year-end and increase through the northern hemisphere selling season to peak at the end of the second quarter. Pioneer is a world leader in developing, producing and marketing corn hybrids and soybean varieties which improve the productivity and profitability of its customers. Additionally, Pioneer...

  • Page 5
    ... DuPont Tate & Lyle Bio Products Company, LLC, to produce BioPDOTM 1,3 propanediol using a proprietary fermentation and purification process. BioPDOTM is the key building block for DuPontTM Sorona® PTT polymer. The major commodities, raw materials and supplies for the Industrial Biosciences segment...

  • Page 6
    ...segment's total sales in 2014. Performance Chemicals Performance Chemicals businesses, DuPont Titanium Technologies (Titanium Technologies) and DuPont Chemicals & Fluoroproducts (Chemicals & Fluoroproducts), deliver customized solutions with a wide range of industrial and specialty chemical products...

  • Page 7
    ... Consolidated Income Statements for the year ended December 31, 2014. GLS/Vinyls specializes in interlayers for laminated safety glass and its key brands include SentryGlas® and Butacite® laminate interlayers. The major commodities, raw materials and supplies for the Performance Materials segment...

  • Page 8
    ... to achieve any particular level of revenue or financial performance. Intellectual Property As a science and technology based company, DuPont believes that securing intellectual property is an important part of protecting its research. Some DuPont businesses operate in environments in which the...

  • Page 9
    ... 14, (2) Management's Discussion and Analysis of Financial Condition and Results of Operations beginning on pages 35, 40-42 and (3) Notes 1 and 15 to the Consolidated Financial Statements. Available Information The company is subject to the reporting requirements under the Securities Exchange Act of...

  • Page 10
    ... derivative commodity instruments to hedge its exposure to price fluctuations on certain raw material purchases. The company takes actions to offset the effects of higher energy and raw material costs through selling price increases, productivity improvements and cost reduction programs. Success in...

  • Page 11
    ... in financial markets or other potential barriers. In October 2013, DuPont announced its intention to separate its Performance Chemicals segment through a U.S. tax-free spin-off to shareholders. On December 18, 2014, DuPont announced that the name of the new Performance Chemicals company will...

  • Page 12
    ... manage safety, human health, product liability and environmental risks associated with the company's products, product life cycles and production processes could adversely impact employees, communities, stakeholders, the environment, the company's reputation and its results of operations...

  • Page 13
    ... class actions against chemical manufacturers generally seeking relief such as medical monitoring, property damages, off-site remediation and punitive damages arising from alleged environmental torts without claiming present personal injuries. The company also has noted a trend in public and private...

  • Page 14
    ... are located in Wilmington, Delaware. The company's manufacturing, processing, marketing and research and development facilities, as well as regional purchasing offices and distribution centers are located throughout the world. Additional information with respect to the company's property, plant and...

  • Page 15
    ... Financial Statements. Litigation Imprelis® Herbicide Claims Process Information related to this matter is included in Note 15 to the Consolidated Financial Statements under the heading Imprelis®. PFOA: Environmental and Litigation Proceedings For purposes of this report, the term PFOA means...

  • Page 16
    ... agreement, the company paid $700 million to the financial institution and received and retired 10.4 million shares at an average price of $67.63 per share. See Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, on page 33 of this report and Note...

  • Page 17
    ... EQUITY SECURITIES, continued Stock Performance Graph The following graph presents the cumulative five-year total shareholder return for the company's common stock compared with the S&P 500 Stock Index and the Dow Jones Industrial Average. 12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013...

  • Page 18
    ... for sale as of December 31, 2012. Working capital at December 31, 2013 includes cash received from the sale of the Performance Coatings business. See Note 2 to the Consolidated Financial Statements for further information. During 2011, the company acquired approximately $8.8 billion of assets in...

  • Page 19
    ...those related to divested businesses; Failure to appropriately manage process safety and product stewardship issues; Effect of changes in tax, environmental and other laws and regulations or political conditions in the United States of America (U.S.) and other countries in which the company operates...

  • Page 20
    ... on asset sales, insurance recoveries, lower performance-based compensation, and the absence of prior-year charges for litigation and product claims, partly offset by higher restructuring charges. Analysis of Operations Redesign Initiative and 2014 Restructuring Plan In June 2014, DuPont announced...

  • Page 21
    ... prices in the Performance Chemicals and Electronics & Communications segments, the latter reflecting lower metals prices. Agriculture local prices were up 1 percent. Sales in developing markets of $11.8 billion were essentially flat versus prior year and represent 34 percent of total company sales...

  • Page 22
    ...gain related to the 2012 sale of a business within the Agriculture segment, partially offset by $87 million lower net pre-tax exchange losses, $27 million increase in interest income, and a $26 million re-measurement gain on an equity investment. Additional information related to the company's other...

  • Page 23
    ... support, enhance operational efficiency, and to reduce residual costs associated with the separation of its Performance Chemicals segment. As a result, during the year ended December 31, 2014 a pre-tax charge of $562 million was recorded, consisting of $497 million in employee separation / asset...

  • Page 24
    ... impact associated with the company's policy of hedging the foreign currency-denominated monetary assets and liabilities of its operations in addition to the impact of gains on sales of businesses and other assets in the Performance Materials and Agriculture segments. The higher effective tax rate...

  • Page 25
    ... the year due to the seasonality of Agriculture in the northern hemisphere. The company also expects to achieve savings from the operational redesign. The 2015 outlook does not reflect the planned separation of the Performance Chemicals segment or the impact of the expected return of capital related...

  • Page 26
    ... in 2013 related to Imprelis® herbicide claims, an increase of $137 million for insurance recoveries of costs related to these customer claims, a gain of $240 million associated with the sale of the copper fungicides and land management businesses, lower performance-based compensation expense...

  • Page 27
    Part II ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued For the first half 2015 sales are expected to be in the mid-single digits percent lower and PTOI is expected to be approximately 10 percent below 2014. The company expects pricing gains ...

  • Page 28
    ... Statements for additional information related to the 2014 restructuring program). 2013 versus 2012 The sales increase represents higher prices and demand for Sorona® polymer for carpeting and increased demand for enzymes for food, partially offset by lower enzyme demand for U.S. ethanol production...

  • Page 29
    ... Statements for additional information related to the 2014 restructuring program). 2013 versus 2012 Sales were up reflecting global pricing gains and increased demand in specialty proteins, probiotics, and cultures, partially offset by the impact of manufacturing site closures in fourth quarter 2012...

  • Page 30
    ...titanium dioxide antitrust litigation, while 2012 PTOI included a $33 million asset impairment charge (see Note 3 to the Consolidated Financial Statements for additional information). Outlook Full year 2015, segment volumes are expected to grow with global gross domestic product with full year sales...

  • Page 31
    ... feedstock costs, higher volumes, and the absence of a $92 million asset impairment charge recorded in 2012 (see Note 3 to the Consolidated Financial Statements for additional information) more than offset lower selling prices and negative currency impact. Outlook Full year 2015 segment sales are...

  • Page 32
    ...II ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued SAFETY & PROTECTION (Dollars in millions) 2014 2013 2012 Segment sales PTOI PTOI margin $ $ 3,896 $ 742 $ 19% 2014 3,884 $ 694 $ 18% 2013 3,825 562 15% Change in segment sales from prior...

  • Page 33
    ...AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued Liquidity & Capital Resources December 31, (Dollars in millions) 2014 2013 Cash, cash equivalents and marketable securities Total debt $ 7,034 $ 10,694 9,086 12,462 Pursuant to its cash discipline policy, the company seeks...

  • Page 34
    ... Performance Coatings business as well as a decline in the Performance Chemicals segment. Higher working capital in the Agriculture segment was a result of higher trade receivables due to an increase in sales in the fourth quarter 2013 as well as an increase in customer credit sales in Latin America...

  • Page 35
    ... of December 31, 2013. See Note 16 Consolidated Financial Statements for additional information relating to the above share buyback plans. (Dollars in millions) 2014 2013 2012 Cash provided by operating activities Purchases of property, plant and equipment Free cash flow $ $ 3,712 $ (2,020) 1,692...

  • Page 36
    ... the company's pension and other long-term employee benefit plans, based on assets and liabilities at December 31, 2014: 1/2 Percentage Point Increase 1/2 Percentage Point Decrease Pre-tax Earnings Benefit (Charge) (Dollars in millions) Discount rate Expected rate of return on plan assets $ 112...

  • Page 37
    ... of time. As a result, changes in tax laws, assumptions with respect to future taxable income, and tax planning strategies could result in adjustments to these assets. See Note 5 to the Consolidated Financial Statements for additional details related to the deferred tax asset balance. Valuation...

  • Page 38
    ... 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued Assessment of the potential impairment of property, plant and equipment, goodwill, other intangible assets and investments in affiliates is an integral part of the company's normal ongoing review of...

  • Page 39
    ..., investment returns on pension trust assets, as well as rules and regulations of the respective country in which the plans operate. The company's remaining pension plans with no plan assets and other long-term employee benefits plans are paid from operating cash flows. The benefit payments...

  • Page 40
    ... employee benefit expense in 2014 is primarily related to higher discount rates and better than expected pension asset returns. The decrease in long-term employee benefit expense in 2013 is primarily related to the retiree medical and dental plan amendment in 2012 and the Performance Coatings sale...

  • Page 41
    ...'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued The company's key assumptions used in calculating its pension and other long-term employee benefits are the expected return on plan assets, the rate of compensation increases and the discount rate (see Note...

  • Page 42
    ... and air conditioning create market opportunities for lower GHG solutions. The current unsettled policy environment in the U.S., where many company facilities are located, adds an element of uncertainty to business decisions, particularly those relating to long-term capital investments. 41

  • Page 43
    ... global policy actions. An effective global climate policy framework will help drive the market changes that are needed to stimulate and efficiently deploy new innovations in science and technology, while maintaining open and competitive global markets. PFOA The Performance Chemicals segment used...

  • Page 44
    ... Consolidated Financial Statements. The following table summarizes the impacts of the company's foreign currency hedging program on the company's results of operations for the years ended December 31, 2014, 2013, and 2012, and includes the company's pro rata share of its equity affiliates' exchange...

  • Page 45
    ... reasonable assurance that information required to be disclosed in the company's reports filed or submitted under the Securities Exchange Act of 1934 (Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. These controls and...

  • Page 46
    ... 57 2006 2004 2011 2014 2009 2014 2014 2014 2009 The company's Executive Officers are elected or appointed for the ensuing year or for an indefinite term and until their successors are elected or appointed. Ellen J. Kullman joined DuPont in 1988 as marketing manager and progressed through various...

  • Page 47
    ... and Performance Materials segments as well as regional management for Europe, Middle East, Africa and Canada. Nicholas C. Fanandakis joined DuPont in 1979 as an accounting and business analyst. Since then, Mr. Fanandakis served in a variety of plant, marketing, and product management and business...

  • Page 48
    ... President of DuPont Safety & Protection. In October 2009, Mr. Vergnano was appointed Executive Vice President. Mr. Vergnano has responsibility for businesses in the Performance Chemicals segment: DuPont Chemicals & Fluoroproducts and DuPont Titanium Technologies. In 2014, DuPont announced that Mr...

  • Page 49
    ... RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information with respect to this Item is incorporated herein by reference to the Proxy, including information within the sections entitled, "Governance of the Company-Review and Approval of Transactions with Related Persons" and...

  • Page 50
    ...) Year Ended December 31, 2014 2013 2012 Accounts Receivable-Allowance for Doubtful Receivables Balance at beginning of period Additions charged to cost and expenses Deductions from reserves Amounts related to the Performance Coatings business Balance at end of period Deferred Tax Assets-Valuation...

  • Page 51
    ... and Deferred Compensation Plan for Directors, as last amended effective January 1, 2009 (incorporated by reference to Exhibit 10.1 to the company's Annual Report on Form 10-K (Commission file number 1-815) for the year ended December 31, 2013). Company's Supplemental Retirement Income Plan, as last...

  • Page 52
    ... AND FINANCIAL STATEMENT SCHEDULES, continued 10.13* Company's Management Deferred Compensation Plan, as last amended effective April 15, 2014 (incorporated by reference to Exhibit 10.13 to the company's Quarterly Report on Form 10-Q (Commission file number 1-815) for the period ended June 30, 2014...

  • Page 53
    ...5, 2015 E. I. DU PONT DE NEMOURS AND COMPANY By: /s/ Nicholas C. Fanandakis Nicholas C. Fanandakis Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) _____ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed...

  • Page 54
    ... Consolidated Balance Sheets as of December 31, 2014 and December 31, 2013 Consolidated Statements of Equity for the years ended December 31, 2014, 2013 and 2012 Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012 Notes to the Consolidated Financial Statements...

  • Page 55
    ... management and directors of the company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the company's assets that could have a material effect on the financial statements. iii. Internal control over financial reporting...

  • Page 56
    ... 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed...

  • Page 57
    ... per share) For the year ended December 31, 2014 2013 2012 Net sales Other income, net Total Cost of goods sold Other operating charges Selling, general and administrative expenses Research and development expense Interest expense Employee separation / asset related charges, net Total Income from...

  • Page 58
    ...Financial Statements CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in millions, except per share) For the year ended December 31, 2014 2013 2012 Net income $ Other comprehensive (loss) income, before tax: Cumulative translation adjustment Net revaluation and clearance of cash flow hedges...

  • Page 59
    ...Company Consolidated Financial Statements CONSOLIDATED BALANCE SHEETS (Dollars in millions, except per share) December 31, Assets Current assets Cash and cash equivalents Marketable securities Accounts and notes receivable, net Inventories Prepaid expenses Deferred income taxes Assets held for sale...

  • Page 60
    ... in consolidated subsidiaries Net income Other comprehensive income Common dividends ($1.70 per share) Preferred dividends Common stock issued - compensation plans Common stock repurchased Common stock retired Balance December 31, 2012 2013 Sale of a majority interest in a consolidated subsidiary...

  • Page 61
    ... year ended December 31, 2014 2013 2012 Operating activities Net income $ Adjustments to reconcile net income to cash provided by operating activities: Depreciation Amortization of intangible assets Net periodic pension benefit cost Contributions to pension plans Gain on sales of businesses Other...

  • Page 62
    ...2013, DuPont entered into a definitive agreement to sell Glass Laminating Solutions/Vinyls (GLS/Vinyls), a part of the Performance Materials segment. The assets related to GLS/Vinyls at December 31, 2013 are presented as held for sale in the Consolidated Balance Sheet. In June 2014, the company sold...

  • Page 63
    ... by the company for the delivery of goods are classified as cost of goods sold in the Consolidated Income Statements. Taxes on revenue-producing transactions are excluded from net sales. The company periodically enters into prepayment contracts with customers in the Agriculture segment and receives...

  • Page 64
    ... discounted cash flow techniques. During the third quarter 2014, the company changed its annual impairment testing from September 30th to July 1st. The company believes this timing is preferable as it better aligns the goodwill impairment test with its strategic business planning cycle. This change...

  • Page 65
    ... time the liability is incurred. Accretion expense is recognized as an operating expense using the credit-adjusted risk-free interest rate in effect when the liability was recognized. The associated asset retirement obligations are capitalized as part of the carrying amount of the long-lived asset...

  • Page 66
    ... company changed from the official exchange rate to the SICAD 2 exchange rate of 49.98, to remeasure its BsF denominated net monetary assets which resulted in a pre-tax charge of $58. The charge is recorded within other income, net in the company's Consolidated Income Statements for the year ended...

  • Page 67
    ... in the company's Consolidated Income Statements for the year ended December 31, 2014. The assets classified as held for sale at December 31, 2013 related to GLS/Vinyls primarily consist of inventory and property, plant and equipment. Performance Chemicals On October 24, 2013, DuPont announced that...

  • Page 68
    ... efficiency, and to reduce residual costs associated with the separation of its Performance Chemicals segment. As a result, during the year ended December 31, 2014 a pre-tax charge of $562 was recorded, consisting of $497 in employee separation / asset related charges, net and $65 in other income...

  • Page 69
    ... future operating performance and economic conditions that may differ from actual cash flows. In connection with the matters discussed above, as of December 31, 2013 and 2012, the company had long-lived assets with a remaining net book value of approximately $90 and $150, respectively, accounted for...

  • Page 70
    ...4,233 An analysis of the company's effective income tax rate (EITR) on continuing operations is as follows: 2014 2013 2012 Statutory U.S. federal income tax rate Exchange gains/losses1 Domestic operations Lower effective tax rates on international operations-net2 Tax settlements Sale of a business...

  • Page 71
    ...years is primarily due to the results of the company's hedging program, gains on sales of businesses primarily in the U.S., and the impact of Imprelis® charges in the U.S. in 2013 versus additional insurance recoveries recorded in the U.S. in 2014. In 2014 and 2013, the U.S. recorded a net exchange...

  • Page 72
    ..., the company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2004. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: 2014 2013 2012 Total unrecognized tax benefits as of...

  • Page 73
    ... 308 2,745 The weighted-average number of common shares outstanding in 2014 and 2013 decreased as a result of the company's repurchase and retirement of its common stock, partially offset by the issuance of new shares from the company's equity compensation plans (see Notes 16 and 18, respectively...

  • Page 74
    ...by reportable segment: Balance as of December 31, 2014 Goodwill Adjustments and Acquisitions Balance as of December 31, 2013 Goodwill Adjustments and Acquisitions Balance as of December 31, 2012 Agriculture Electronics & Communications Industrial Biosciences Nutrition & Health Performance Chemicals...

  • Page 75
    ... assets subject to amortization (Definite-lived) Customer lists Patents Purchased and licensed technology Trademarks Other1 Intangible assets not subject to amortization (Indefinite-lived) In-process research and development Microbial cell factories2 Pioneer germplasm3 Trademarks/tradenames...

  • Page 76
    .... The decrease in the interest rate for 2014 was primarily due to long-term debt maturing within one year. 12. OTHER ACCRUED LIABILITIES December 31, 2014 2013 Compensation and other employee-related costs Deferred revenue Employee benefits (Note 17) Discounts and rebates Derivative instruments...

  • Page 77
    ... Financial Statements. Based on quoted market prices for the same or similar issues, or on current rates offered to the company for debt of the same remaining maturities, the fair value of the company's long-term borrowings was $9,970 and $11,130 at December 31, 2014 and 2013, respectively...

  • Page 78
    ... Company Notes to the Consolidated Financial Statements (continued) (Dollars in millions, except per share) 14. OTHER LIABILITIES December 31, 2014 2013 Employee benefits: Accrued other long-term benefit costs (Note 17) Accrued pension benefit costs (Note 17) Accrued environmental remediation costs...

  • Page 79
    ... closure, reclamation and removal costs for mining operations related to the production of titanium dioxide in Performance Chemicals. The company's asset retirement obligation liabilities were $52 and $63 at December 31, 2014 and 2013. Imprelis® The company has received claims and has been served...

  • Page 80
    ... claims against DuPont only for those human diseases for which the C8 Science Panel determined a probable link exists. At December 31, 2014, there were approximately 2,900 lawsuits filed in various federal and state courts in Ohio and West Virginia, an increase of about 2,800 over year end 2013...

  • Page 81
    ... year ended December 31, 2014, the company repurchased and retired 4.7 million shares in the open market for a total cost of $300. In December 2012, the company's Board of Directors authorized a $1,000 share buyback plan. In February 2013, the company entered into an ASR agreement with a financial...

  • Page 82
    ...Financial Statements (continued) (Dollars in millions, except per share) Set forth below is a reconciliation of common stock share activity for the years ended December 31, 2014, 2013 and 2012: Shares of common stock Issued Held In Treasury Balance January 1, 2012 Issued Repurchased Retired Balance...

  • Page 83
    ... computation of net periodic benefit cost of the company's pension and other long-term employee benefit plans. See Note 17 for additional information. Tax benefit (expense) recorded in Stockholders' Equity was $1,461, $(1,617) and $(70) for the years 2014, 2013 and 2012, respectively. Included in...

  • Page 84
    ... Long-term Employee Benefits The parent company and certain subsidiaries provide medical, dental and life insurance benefits to pensioners and survivors. The associated plans for retiree benefits are unfunded and the cost of the approved claims is paid from company funds. Essentially all of the cost...

  • Page 85
    ... per share) Summarized information on the company's pension and other long-term employee benefit plans is as follows: Pension Benefits Obligations and Funded Status at December 31, 2014 2013 2014 Other Benefits 2013 Change in benefit obligation Benefit obligation at beginning of year Service cost...

  • Page 86
    ...and Company Notes to the Consolidated Financial Statements (continued) (Dollars in millions, except per share) The pre-tax amounts recognized in accumulated other comprehensive loss are summarized below: Pension Benefits December 31, 2014 2013 2014 Other Benefits 2013 Net loss Prior service benefit...

  • Page 87
    ...the participant's entire career at the company. Pension Benefits Other Benefits 2012 2014 2013 2012 Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31, 2014 2013 Discount rate Expected return on plan assets Rate of compensation increase 4.55...

  • Page 88
    ... periodic benefit costs, the discount rate, expected return on plan assets and the rate of compensation increase were 4.10 percent, 8.75 percent and 4.40 percent for 2013. In connection with the planned sale of the Performance Coatings business (See Note 2), the company updated the discount rate and...

  • Page 89
    ... plan assets of the company's U.S. and non-U.S. pension plans is summarized as follows: Target allocation for plan assets at December 31, 2014 2013 U.S. equity securities Non-U.S. equity securities Fixed income securities Hedge funds Private market securities Real estate Cash and cash equivalents...

  • Page 90
    ... The company's pension plans directly held $737 (4 percent of total plan assets) and $648 (3 percent of total plan assets) of DuPont common stock at December 31, 2014 and 2013, respectively. Primarily receivables for investment securities sold. Primarily payables for investment securities purchased...

  • Page 91
    ...to the Consolidated Financial Statements (continued) (Dollars in millions, except per share) The company's pension plans hold Level 3 assets which are primarily ownership interests in investment partnerships and trusts that own private market securities and real estate. Fair value is generally based...

  • Page 92
    ... and 2012, respectively. The income tax benefits related to stock-based compensation arrangements were $50, $43 and $35 for 2014, 2013 and 2012, respectively. In April 2011, the shareholders approved amendments to the DuPont Equity and Incentive Plan (EIP). The EIP provides for equitybased and cash...

  • Page 93
    ...all option holders exercised their in-the-money options at year end. The amount changes based on the fair market value of the company's stock. Total intrinsic value of options exercised for 2014, 2013 and 2012 were $219, $230 and $147, respectively. In 2014, the company realized a tax benefit of $72...

  • Page 94
    ... variable compensation plans under which cash awards may be granted. These plans include the company's regional and local variable compensation plans and Pioneer's Annual Reward Program. Such awards were $151, $317 and $379 for 2014, 2013 and 2012, respectively. 19. DERIVATIVES AND OTHER HEDGING...

  • Page 95
    ... assets and liabilities of its operations. The primary business objective of this hedging program is to maintain an approximately balanced position in foreign currencies so that exchange gains and losses resulting from exchange rate changes, net of related tax effects, are minimized. The company...

  • Page 96
    ... Note 1, as of December 31, 2014 and 2013. Fair Value at December 31 Using Level 2 Inputs Balance Sheet Location 2014 2013 Asset derivatives: Derivatives designated as hedging instruments: Interest rate swaps1 Interest rate swaps1 Foreign currency contracts Accounts and notes receivable, net Other...

  • Page 97
    ... income (loss). For cash flow hedges, this represents the effective portion of the gain (loss) reclassified from accumulated OCI into income during the period. For the years ended December 31, 2014, 2013 and 2012, there was no material ineffectiveness with regard to the company's cash flow hedges...

  • Page 98
    ... the Consolidated Financial Statements (continued) (Dollars in millions, except per share) 20. GEOGRAPHIC INFORMATION Net Sales1 2014 2013 2012 United States Canada EMEA2 France Germany Italy Africa Other Total EMEA Asia Pacific China India Japan Other Total Asia Pacific Latin America Brazil Mexico...

  • Page 99
    ... and Company Notes to the Consolidated Financial Statements (continued) (Dollars in millions, except per share) Net Property1 2014 2013 2012 United States Canada EMEA2 Denmark France Spain The Netherlands Other Total EMEA Asia Pacific China Other Total Asia Pacific Latin America Brazil Mexico...

  • Page 100
    ... nearly as practicable, the market value of the products. Segment net assets includes net working capital, net property, plant and equipment, and other noncurrent operating assets and liabilities of the segment. Affiliate net assets (pro rata share) excludes borrowing and other long-term liabilities...

  • Page 101
    ... & Health Performance Chemicals Performance Materials Safety & Protection Other Total 2014 Segment sales Less: Transfers Net sales PTOI Depreciation and amortization Equity in earnings of affiliates Segment net assets Affiliate net assets Purchases of property, plant and equipment 2013 Segment...

  • Page 102
    ...) (Dollars in millions, except per share) Reconciliation to Consolidated Financial Statements PTOI to income from continuing operations before income taxes 2014 2013 2012 Total segment PTOI Non-operating pension and other postretirement employee benefit costs Net exchange gains (losses), including...

  • Page 103
    ... Chemicals - $(21), Performance Materials - $(99), Safety & Protection - $(52), and Other - $(22). See Note 3 for additional information. Included income of $210 for insurance recoveries, recorded in other operating charges, associated with the company's process to fairly resolve claims related...

  • Page 104
    ...for additional information. Included a $117 gain recorded in other income, net associated with the sale of a business. Included a $(134) restructuring charge recorded in employee separation/asset related charges, net primarily as a result of the company's plan to eliminate corporate costs previously...

  • Page 105
    ... quarter 2013 included a net $5 restructuring adjustment consisting of a $24 benefit associated with prior year restructuring programs and a $(19) charge associated with restructuring actions related to a joint venture. The majority of the $24 net reduction recorded in employee separation/asset...

  • Page 106
    ...the company's website at http://www.dupont.com. This site includes important information on products and services, financial reports, news releases, environmental information and career opportunities. The company's periodic and current reports filed with the SEC are available on its website, free of...